Do I have recourse to collect a debt owed that was not included in the bankruptcy of a person owes me money?

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Do I have recourse to collect a debt owed that was not included in the bankruptcy of a person owes me money?

I loaned a friend $25,000 and he said that if he included it in his bankruptcy that he couldn’t reaffirm the debt. I thought when you filed you had to declare all debts and reaffirm those you want to repay. Do I have any recourse to collect? Is this a criminal case of fraud?

Asked on August 15, 2011 Washington

Answers:

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 10 years ago | Contributor

Your friend is wrong (not only is he wrong, what he said makes no sense).  A debt can ONLY be reaffirmed during a bankruptcy case, so to say if he included it in bankruptcy, it can't be reaffirmed is a nonsensical statement.   Kind of like saying, you can't swim in the ocean if there's water in it.

And no, you don't have any recourse to collect on the debt regardless of whether it is "included" in the bankruptcy case or not (I assume by "included" that you mean listed in the schedules).   In fact, if he files a Chapter 7 case in which no assets are being liquidated by the Trustee, there is no penalty at all for failure to list debts.  But regardless, you are prevented from taking any collection action by the automatic stay.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/

Follow Me on Twitter:  @bklawr

Mark J. Markus / Mark J. Markus, Law Offices of

Answered 10 years ago | Contributor

Your friend is wrong (not only is he wrong, what he said makes no sense).  A debt can ONLY be reaffirmed during a bankruptcy case, so to say if he included it in bankruptcy, it can't be reaffirmed is a nonsensical statement.   Kind of like saying, you can't swim in the ocean if there's water in it.

And no, you don't have any recourse to collect on the debt regardless of whether it is "included" in the bankruptcy case or not (I assume by "included" that you mean listed in the schedules).   In fact, if he files a Chapter 7 case in which no assets are being liquidated by the Trustee, there is no penalty at all for failure to list debts.  But regardless, you are prevented from taking any collection action by the automatic stay.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

http://www.bklaw.com/

Follow Me on Twitter:  @bklawr


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